Nigeria’s broad cash provide declined for the second time this yr, falling barely to N119.01 trillion in Could 2025, in accordance with recent information from the Central Bank of Nigeria (CBN).
The drop represents a month-on-month contraction of N292.75 billion or 0.25% from the N119.30 trillion recorded in April.
The primary decline of 2025 was recorded in February, when the determine dropped to N110.32 trillion from N110.94 trillion in January.
Regardless of the slight decline, the cash provide stays close to document highs, reflecting the residual results of earlier liquidity surges and ongoing changes in financial coverage.
Yr-on-year, the expansion is much more placing — cash provide expanded by N19.77 trillion, up from N99.24 trillion in Could 2024. This marks a pointy 19.9% improve and highlights the size of financial growth that has occurred over the previous 12 months.
A better have a look at the parts of broad cash (M3) reveals a notable shift in liquidity sources. In April, the surge in cash provide was pushed largely by greater web international property, which stood at N49.87 trillion. Nevertheless, by Could, this determine had dropped sharply to N45.81 trillion, a fall of N4.05 trillion or 8.1%. The contraction means that Nigeria’s exterior asset place weakened, presumably because of the decline within the FX reserves.
The year-on-year numbers provide a broader perspective on Nigeria’s financial tendencies. Whole cash provide (M3) rose by practically N20 trillion between Could 2024 and Could 2025, a rise of 19.9%.
The bounce was largely fuelled by an enchancment within the nation’s international asset base. Internet international property grew from N15.34 trillion in Could 2024 to N45.81 trillion in Could 2025, a rise of over N30 trillion or 198%.
This progress in international property probably displays the buildup of FX reserves, elevated oil receipts, and improved exterior financing situations following debt issuances and coverage reforms. Nevertheless, the image will not be fully optimistic.
Over the identical interval, web home property truly declined from N83.90 trillion to N73.19 trillion, a drop of N10.71 trillion or 12.8%. This implies that home liquidity — pushed by {bank} credit score, authorities borrowing, and CBN’s web claims — might have tightened, presumably as a part of broader efforts to rein in inflation.
The CBN’s latest financial tightening — together with the excessive Financial Coverage Charge (MPR) and extra aggressive use of Open Market Operations (OMO) — is beginning to replicate within the information. The Could decline in cash provide, notably in essentially the most liquid parts like M1, factors to early success in efforts to scale back extra liquidity and tame inflationary pressures.
